Investors Unfazed as Microsoft (MSFT) CEO Nadella Sells Shares

Stock price holds steady despite news that Nadella sold nearly half his holdings

'Tis the season for selling company stock. After Tesla, Inc. (TSLA) CEO Elon Musk set off a kerfuffle by selling 10% of his holdings in the electric car company, Microsoft Corporation (MSFT) CEO Satya Nadella followed suit last week. According to an SEC filing, Nadella sold 838,584 shares—roughly half of his holdings in Microsoft—for more than $285 million on Nov. 22, 2021, and Nov. 23, 2021.

Key Takeaways

  • Microsoft CEO Satya Nadella sold almost half of his holdings in the company for $285 million.
  • The sale was made for personal reasons, according to a Microsoft spokesperson.
  • Nadella has led the tech giant during a period of growth and reinvention.
  • Investors in Microsoft stock seem to have taken the news in stride, and the company's share price remains mostly unchanged.

The sale of a large block of shares by a senior executive can be a cause for concern for investors and signal the beginning of a downtrend in a company's stock price. But Microsoft's stock has not witnessed much movement since news broke. It fell 1% in after-hours trading on Nov. 29, 2021, and is currently trading at $333.77, relatively unchanged from the day's start.

A Microsoft spokesperson said that Nadella made the sale for "personal financial planning and diversification reasons." A Wall Street Journal piece surmises that he may have made the sale to escape a 7% long-term capital gains tax for sales above $250,000 that Washington State plans to institute starting next year.

A Successful CEO

Nadella took the reins at Microsoft in 2014 and has presided over a period of growth at the firm. The tech giant was once considered an also-ran against rival Apple Inc. (AAPL). Under Nadella's steady hand, it has reinvented itself as a cloud powerhouse and made forays into new and emerging industries, such as hardware and the metaverse. 

The pandemic and its aftermath proved especially beneficial to Microsoft's business and its stock price. Boosted by increasing demand for its cloud services division and for its productivity and collaboration software, the company reported record revenues. Its stock price has jumped by more than 50% this year, and it briefly overtook Apple twice—once this year and once last year—to become the world's most valuable company by market capitalization.

This is the not the first time that Nadella has sold a large tranche of his holdings in the company he leads. Back in 2019, he sold 328,000 shares—amounting to one-third of his holdings then—during another peak in Microsoft's shares, for prices ranging between $109.08 and $109.68. Nadella earned almost $50 million in 2021 with a base salary of $2.5 million and stock awards of $33 million. He was appointed chairman of Microsoft board in June 2021.

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  1. SEC. "Microsoft Inc. Filing." Accessed Nov. 30, 2021.

  2. Wall Street Journal. "Microsoft's Satya Nadella Sells Half His Shares in the Company." Accessed Nov. 30, 2021.

  3. Wall Street Journal. "Microsoft Eclipses Apple As Most Valuable Company." Accessed Nov. 30, 2021.

  4. CNBC. "Microsoft CEO Satya Nadella Sells 30% of Common Stock." Accessed Nov. 30, 2021.

  5. SEC. "Microsoft Proxy Statement." Accessed Nov. 30, 2021.